Alabama's commercial construction has economic impact near $10B

Monday

Oct 14, 2013 at 12:01 AM

BIRMINGHAM | The commercial construction industry has close to a $10 billion annual economic impact on Alabama, the first-ever study of its kind found. The Associated Builders and Contractors of Alabama commissioned the first detailed look at the economic impact of the construction industry on the state, Al.com reported.

The Associated Press

BIRMINGHAM | The commercial construction industry has close to a $10 billion annual economic impact on Alabama, the first-ever study of its kind found. The Associated Builders and Contractors of Alabama commissioned the first detailed look at the economic impact of the construction industry on the state, Al.com reported. The findings by Dr. Keivan Deravi, economics professor at Auburn University at Montgomery, were surprising to ABC Alabama officials. Consider: The total economic impact of the commercial construction industry in the state is more than $9.6 billion. The economic output — payroll and non-payroll expenditures — of construction is more than $9.3 billion, making it the largest industry in the state, accounting for 41 percent of all output in Alabama. By comparison, all of manufacturing accounts for 19 percent of output, and the services industry accounts for 16 percent. Construction accounts for 150,000 jobs in the state, 116,644 of which are direct jobs. Commercial construction alone accounts for 61,858 direct jobs in the state. The construction industry is responsible for 56 percent of all of the state's jobs. Construction in Alabama has an annual payroll of $7 billion. The industry has a direct impact of $402 million on the state's Education Trust Fund. Construction in Alabama contributes $140 million in sales taxes, $19 million in use taxes, $27.4 million in utility taxes, and $216.7 million in individual and corporate income taxes each year. “It was shocking to even us,” Geoff Golden, chief executive of Birmingham's Golden Construction and the chairman of ABC Alabama when the study was commissioned and completed. “We have thought all along we were a major industry in the state, but when we saw the actual numbers, it blew us away.” In an interview, Deravi said the industries tied to construction are obvious, such as architecture and engineering, but others may not be so obvious, such as concrete, paper, pulp, lumber and wood industries or even carpet or flooring. “What surprised me was the breadth and depth of it,” he said. “We wanted to look at the whole enchilada.” Golden said when he became chairman of ABC Alabama the organization's mission was to increase the exposure and relevance of the construction industry in the state. That was hard to do without data. “We had never done something like this before,” he said. “Other industries from farming to fishing can tell you their impact. We needed to be able to do the same. What is the size of this animal we call the construction industry?”